Indian equity benchmarks traded
with traction and settled near intraday high levels with a gain of over half a
percent on Thursday, with key gauges surpassing their crucial 28,300 (Sensex)
and 8,750 (Nifty) levels. Traders took encouragement with report that India's
exports continued to grow for the fifth straight month, expanding by 4.32
percent to $ 22.11 billion in January against $ 21.19 billion in the same month
of 2016. Imports also rose, by 10.70 percent to $ 31.95 billion, during the
month under review. Some support also came after Fed Chair Janet Yellen, who in
her second day of economic testimony before Congress, offered no additional
insight on the timing of the central bank's next rate hike. Moreover, investors
closely watched GST Council meet scheduled on February 18 and assembly
elections in five states that will end on March 8. The performance of Prime
Minister Narendra Modi's party in ongoing state elections will determine if the
trickle of foreign money returning to Indian stocks turns into a gush. On the global front, European markets traded
in red in early deals, as investors offload positions in risky assets amid
expectations that the Federal Reserve could raise interest rates more
aggressively than expected following upbeat U.S. economic data. Asian markets
ended mixed, as traders opted to take profit off the table at higher levels.
Back home, there was broad based buying witnessed in the markets and apart from
the blue chips, the broader markets too participated strongly in the rally. On
the sectoral front, IT stocks remained on buyers' radar after the industry body
NASSCOM said that restrictions on H-1B visas in the US and the impact of Brexit
are threatening to disrupt the growth trajectory of India's information technology
sector. Buying in realty stocks too aided sentiments on reports that private
equity investments in the real estate sector increased by 26 percent during
2016 and touched a nine-year high of nearly Rs 40,000 crore. Finally, the BSE
Sensex surged 145.71 points or 0.52% to 28,301.27, while the CNX Nifty was up
by 53.30 points or 0.61% to 8,778.00.
The US markets closed mostly
lower on Thursday, weighed down by a decline in energy stocks, with the Dow
industrials the only index to gain another record high at the close. Stocks,
which had earlier in the session switched between small gains and losses,
started settling in negative territory during President Donald Trump's news
conference as he announced that a proposed replacement to the Affordable Care Act,
also known as Obamacare, would come in March, before any proposals on tax
reform. On the economy front, the number of Americans who applied for
unemployment benefits in mid-February rose by 5,000 to 239,000, but they
remained at exceedingly low levels that reflect the resilience of a nearly
eight-year-old economic recovery. New claims have registered less than 300,000
for 102 straight weeks, the longest stretch since the early 1970s. The less
volatile four-week average of initial claims, meanwhile, rose by a scant 500 to
245,250. The Nasdaq was down 4.54 points or 0.08 percent to 5,814.90, S&P
500 lost 2.03 points or 0.09 percent to 2,347.22, while the Dow Jones
Industrial Average added 7.91 points or 0.04 percent to 20,619.77.
Crude oil futures recovered from
the intraday lows to post modest gains on Thursday, following reports OPEC
could extend its output-cut agreement to non-members amid concerns of a surge
in U.S. crude and shale production. Although OPEC has achieved 92% compliance
with a plan to shrink output, the cartel may have to increase the pace of cuts
and extend the agreement beyond June. Benchmark crude oil futures for March
delivery gained $0.25 or 0.5 percent to $53.36 on the New York Mercantile
Exchange. In London, Brent crude for March delivery ended lower by $0.04 or 0.07
percent at $55.71 on the ICE.
Indian
rupee ended weaker against dollar on Thursday on account of sustained demand
for dollar from banks and importers. Sentiments remained dampened with the US
thinktank report stating that India ranked a dismal 143 in an annual index of
economic freedom, behind its several South Asian neighbours, as progress on
market-oriented reforms has been uneven. It also said that despite India
sustaining an average annual growth of about 7 per cent over the past five
years, growth is not deeply rooted in policies that preserve economic freedom.
However, gains of local equities coupled with dollar's weakness against the
basket of other major currencies limited further depreciation of Indian currency.
On the global front, yen was stronger against its rival currencies on Thursday,
as weakness in Tokyo stocks prompted investors to seek the perceived safety of
the Japanese currency. Finally, the rupee ended at 67.07, 16 paise weaker from
its previous close of 66.91 on Wednesday.
The
FIIs as per Thursday's data were net buyers in equity and debt segments both. In
equity segment, the gross buying was of Rs 5551.14 crore against gross selling
of Rs 5297.52 crore, while in the debt segment, the gross purchase was of Rs
1060.08 crore with gross sales of Rs 814.33 crore.
The US markets ended almost flat
after a lackluster performance in the last session, as traders expressed some
uncertainty about the near-term outlook for the markets following the recent
run to record highs. The Asian markets have made mixed start after a rekindling
of reflation trades that had been fueled by optimism that the U.S. economy can
withstand higher interest rates. The Indian markets bounced back in last
session supported by gain in IT stocks. Today, the start is likely to be
flat-to-positive with not so bullish sentiments from the Asian peers. Traders
will be getting some support with Finance Minister Arun Jaitley's statement
that situation is normal as far as remonetisation is concerned and RBI is
monitoring cash position on a daily basis. Minister of State for Finance Arjun
Ram Meghwal too has said that demonetisation of old high value currency and the
government's push towards digital economy will definitely expand India's GDP. He
also said that India was on the verge of a transition from a large cash economy
to a less cash and digital economy. However there will be cautiousness too with
domestic rating agency India Ratings and Research (Ind-Ra) dosen't expecting
the performance of Indian companies to improve substantially in FY18. Pick-up
in capital expenditure by the private sector is at least another two fiscal
years away. Rise in commodity prices and uptick in interest rates amid rate
hikes globally are two important risks to slow-but-improving demand for FY18.
There will be some scrip specific action with change announcement of NSE's
benchmark index Nifty, where BHEL and Idea will be making way for HDFC and IOC
from March 31, 2017.
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
8778.00
|
8737.08
|
8801.43
|
BSE Sensex
|
28301.27
|
28189.03
|
28370.68
|
Nifty Top volumes
Stock
|
Volume
(in Lacs)
|
Previous close (Rs)
|
Support
(Rs)
|
Resistance (Rs)
|
SBI
|
217.95
|
270.50
|
267.77
|
275.12
|
ICICI Bank
|
184.16
|
278.80
|
273.95
|
282.55
|
Tata Motors
|
116.23
|
446.00
|
438.40
|
450.60
|
ITC
|
105.75
|
266.65
|
264.40
|
270.20
|
Hindalco
|
104.29
|
187.75
|
183.73
|
190.28
|
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NTPC is planning to expand into cement manufacturing with the twin objectives of utilising fly ash from its power stations and create captive demand for electricity.